Public Fund Survey

Summary of Findings for FY 2024                                                                                                         December 2025

 

About the Public Fund Survey

The Public Fund Survey is an online compendium of key characteristics and trends affecting the nation’s largest public retirement systems. The Survey is prepared by the National Association of State Retirement Administrators.

First published in 2003 based on FY 02 findings that include comparatives from FY 01, this marks the 23rd edition of the Public Fund Survey Summary of Findings. The Survey contains data on public retirement systems that provide pension and other benefits for 13.6 million active (working) members and 11.1 million annuitants (those receiving a regular benefit, including retirees, disabilitants and surviving beneficiaries). At the end of fiscal year 2024, systems in the Survey held combined defined benefit plan assets of $5.13 trillion. The membership and assets of systems included in the Survey comprise nearly 90 percent of the entire state and local government defined benefit plan community. This report, focusing on FY 24, uses graphs and narrative to illustrate and describe changes in selected key elements of public retirement systems and the pension plans and funds they oversee. 

Some of the information in this report is presented in the context of changes to median, or midpoint, data. Presenting changes based on a median, rather than aggregate (total) basis, reduces the effects of larger systems and plans and those with extreme or exceptional results, enabling readers to focus on the experience of a more typical system or plan instead of results that could be skewed by the experience of one or a few outliers.

Summary of Findings 

Figure A plots the aggregate actuarial funding level and the combined actuarial values of assets and liabilities among plans in the Survey since its inception in FY 2001. The aggregate funding level in FY 24 was 76.7 percent, up from 75.8 percent in FY 23. The FY 24 increase in the aggregate funding level is attributable chiefly to relatively strong investment returns in FY 24 and for the five years ended in FY 24. These returns are discussed below and shown in Figure O. 

The aggregate actuarial value of assets grew in FY 24 by 5.4 percent, from $4.69 trillion to $4.94 trillion. The actuarial value of assets reflects the time periods most plans use to phase in investment gains and losses, a calculation also known as actuarial smoothing. Smoothing reduces year-to-year volatility in a pension plan’s funding level and required cost. 

Smoothing periods for plans in the survey range from zero, meaning no smoothing, to 10 years. A few plans do not smooth their actuarial value of assets, instead reporting their funding condition using the market value of assets. 

Combined actuarial liabilities of plans in the Survey grew by 4.1 percent, from $6.19 trillion to $6.45 trillion. Liabilities change as a result of four factors: a) because liabilities are a present value, they increase at a rate of interest equal to the prior year’s discount rate; b) new benefit accruals resulting from active participants accruing an additional year of service credit; c) payment of benefits to retired participants (which reduces liabilities); and d) changes in actuarial assumptions and actuarial experience that differs from assumptions. 

Since the market decline of 2008-09 and the Great Recession, every plan in the Public Fund Survey has reduced its most consequential actuarial assumption—the rate of assumed or expected investment return. Lower investment return assumptions have created a strong headwind to efforts by public retirement systems and their plan sponsors to improve funding levels. The pace of changes to the investment return assumption has slowed markedly in recent years, chiefly since 2021, when the rate of inflation rose sharply. Many plans also have adjusted other actuarial assumptions, including mortality assumptions to reflect expected longer lives. Like a lower investment return assumption, improved mortality assumptions result in a reduced plan funding level and higher cost, as plan participants are projected to live longer, thereby receiving benefits for a longer period of time. 

See the NASRA issue brief on investment return assumptions. 

Figure A

FY 24 funding levels of the 129 plans in the Survey are depicted in Figure B. The size of each circle is roughly proportionate to the size of each plan’s actuarial liabilities—larger bubbles reflect larger plans and smaller bubbles reflect smaller plans. The median funding level is 77.8 percent and the range is 28 percent to 108 percent. This chart illustrates the wide distribution of funding conditions among public pension plans, one outcome of the unique combination of the actuarial experience, assumptions, and methods of each plan in the Survey.

Figure B

Figure C plots the median annual change since FY 02 among plans in the Survey in the actuarial value of assets and liabilities. For a pension plan’s funding level to improve, its actuarial value of assets must grow faster than its liabilities. At a median rate at or below 4.0 percent for the seventh consecutive year, liability growth remains below historical rates and extends a secular trend of lower rates of liability growth that began following the Great Recession. Lower liability growth generally is due to factors that vary by plan, but typically include lower interest accruals due to the wave of reductions to assumed rates of investment returns; actual inflation below expectations (which generally results, among other things, in slower salary growth); plan maturity (i.e., fewer active (working) participants relative to the number of annuitants); and the effects of many reforms (predominantly reductions) in pension benefits enacted in recent years. Rates of liability growth in previous years would have been even lower were many plans not also reducing their investment return assumption (see Figure P), and adjusting mortality assumptions to reflect longer lives, changes that increase a plan’s liabilities.  

As discussed previously, most plans smooth, or phase in, their investment gains and losses for the purpose of reducing volatility in the plan’s funding level and required cost. Approximately two-thirds of plans in the survey smooth their investment gains and losses over five years; four-year smoothing is the second-most common period. The remaining plans phase in gains and losses over periods that range from zero (meaning no smoothing and using only the market value of assets), to 10 years.

Because five years is the predominant period used by plans to recognize investment gains and losses, combined with the significant effect that investment performance relative to a plan’s investment return assumption has on the plan’s funding level, a plan’s five-year investment return  (as shown in Figure O) can be instructive in discerning the effect of recent market performance on the funding level of individual plans (where relevant) and in the aggregate. For example, in the case of a theoretical plan with an investment return assumption of 7.0% and an actual annualized five-year investment return of 7.5%, assuming the plan achieved its other actuarial assumptions, that plan’s funding level is likely to be higher because of its actual investment return outperforming its assumed investment return.

Figure C

1. Median growth in the number of annuitants continued its long-term slowdown, falling below two percent for the second time since the Survey’s inception. FY 24 is the ninth consecutive year in which median annuitant growth was below 3.5 percent.
2. Median growth in the number of actives rose above two percent for the second time since FY 06. This pattern is consistent with US Bureau of Labor Statistics reports showing steady increases in state and local employment since 2022. 

Figure D

On a market value basis, as of FY 24, systems in the Survey held a combined $5.13 trillion in assets, an increase of 8.0 percent from FY 23. FY 24 marks the first year in which the aggregate value of assets for systems in the Survey exceeded $5.0 trillion. Figure E, which plots the fiscal year-end value of assets for systems in the Survey, reflects the effects of market volatility in recent years. As the aggregate market value of funds in the Public Fund Survey has grown by roughly $1.9 trillion over the past decade, these same plans also have paid out approximately $3.0 trillion in benefits. Collectively, the portion of assets held by the systems in the Survey represents over 85 percent of the total FY 24 public pension assets identified by the U.S. Census Bureau.

Figure E

Figure F plots the combined revenues and expenditures of the systems in the Survey. The green line reflects investment gains and losses, which fluctuate in accordance with volatility in global financial markets. The blue bars indicate employee and employer contributions, and the red bars show benefit payments. Contributions and benefit payments grow at mostly steady and predictable rates, while growth or decline in investment earnings is much more volatile, corresponding with volatility in global capital markets. Because most plans pay out more each year in benefits than they receive in contributions, contributions are used to pay current benefits (as shown in Figure I), while most investment earnings accrue to pension trust funds. Pension trust funds are established for the sole purpose of paying benefits and funding administrative costs. The benefits paid by public pension plans are paid from these trust funds, not from state and local government operating budgets or general funds.

Growth in levels of contributions and benefits is mostly stable and predictable over time. Investment earnings, which comprise over 60 percent of public pension revenues over the past 30 years, vacillate, often appreciably, depending on market performance (see Figure N). 

Figure F

1. FY 02 to FY 08: payrolls grew at a fairly typical rate of between three and five percent; 
2. FY 09 to FY 12: median payroll growth was either declining or negative
3. FY 13 to FY 22: median payroll growth began to grow, slowly at first, until reaching a more typical level in FY 22

Figure G

Figure H presents the distribution of change in payroll from FY 23 to FY 24, and the median payroll growth, for the 120 plans in the Survey that are open to new hires and that report this metric. The individual plan experience ranged from a decline of 3.3 percent to an increase of 17.1 percent, creating a wide range of outcomes between those two extremes. Despite recent growth, the impact of sluggish growth in previous years is still impacting many plans. Of the 117-plan Survey sample for which this comparison is possible, only 40, or 34 percent, have a higher covered payroll in FY 24 than they would expect had they achieved three percent annual growth since FY 09. The remaining 77 plans, or 66 percent of the sample, have a lower covered payroll in FY 24 than they would have had following three percent annual growth since FY 09. 

Figure H

Figure I plots the median external cash flow as a percentage of assets since FY 01. External cash flow is the difference between a plan’s revenue from contributions, and payouts for benefits and administrative expenses. External cash flow excludes investment gains and losses. Dividing a plan’s cash flow into the market value of the system’s assets produces the measure of cash flow as a percentage of assets. External cash flow typically declines as a plan matures: a growing number of annuitants, combined with slow or negative growth in active members increases benefit payments relative to contributions. Conversely, a growing asset base will offset the rate of negative cash flow. Contributions made below the actuarially recommended rate can also contribute to a plan’s negative cash flow. All else equal, as a plan approaches full funding, it can expect its external cash flow to decline, as fewer contributions are needed to pay down its unfunded liabilities. 

Nearly all plans in the survey have an external cash flow that is negative, meaning they pay out each year more in benefits and administrative expenses than they collect in contributions. Negative cash flow is not, by itself, an indication of financial or actuarial distress. Pension plans are designed to accumulate assets during participants’ working years and pay them out as benefits as those participants retire. As a plan matures and its retiree population increases, benefit payments will naturally increase relative to contributions. When combined with a low funding level, a lower (more negative) cash flow may require the plan’s assets to be managed more conservatively, with a larger allocation to more liquid assets to meet current benefit payroll requirements. For example, in 2018, the Kentucky Public Pensions Authority reduced the investment return assumption of one of its plans—the Kentucky Employees’ Retirement System—to 5.25 percent, because the plan’s funding level (then below 20 percent) required the fund to maintain a relatively large portion of its assets in more liquid securities that do not generate a significant investment return.

The median external cash flow increased in FY 24, rising to -1.98 percent from -2.1 percent in FY 23. FY 24 marks the first year since FY 04 in which median cash flow is above -2.0 percent following 19 years at or below that level. This is most likely a result of a) higher levels of pension contributions received by many plans, including excess contributions above actuarial requirements, and b) slower rates of growth in the number of annuitants (see Figure D), to whom benefits are paid, in recent years.

Figure I

Figures J and K reflect changes in median employee and employer contribution rates. Figure J includes active members and employers for participants who also participate in Social Security; Figure K includes those participants and their employers who do not participate in Social Security. These contribution rates apply predominantly to general employees and public school teachers and do not reflect those for public safety workers and narrow employee groups, such as legislators, judges, etc.

Approximately one-quarter of employees of state and local government do not participate in Social Security, including approximately 40 percent of all public school teachers and a majority to substantially all state and local government workers in seven states: Alaska, Colorado, Louisiana, Maine, Massachusetts, Nevada, and Ohio.

Nearly every state has made changes to its pension plan(s) design or financing arrangement, or both, since 2009; the most common change has been an increase in required employee contribution rates. This trend is reflected in Figures J and K. Following a lengthy period at 5.0 percent, Figure J shows the median employee contribution rate for employees participating in Social Security holding consistently since FY 22 at around 6.25 percent. Median contribution rates for non-Social Security-participating employees remained steady in FY 24 at 9.0 percent, the median rate since FY 20, following many years at 8.0 percent. 

Contribution rates among employers whose employees are both in and out of Social Security have increased considerably since the inception of the Survey. This increase is due primarily to the increase in unfunded pension liabilities and, more recently, a strengthened effort among many employers to increase their effort to pay a greater share of the actuarially determined contribution. FY 02, the first year of the contribution rates measurement period, was at or near the all-time low point for employer contribution rates. These low rates were a result partly of strong investment earnings in the late 1990s, as aggregate unfunded liabilities for the public pension community were around zero and many public pension plans had an actuarial funding ratio above 100 percent. The rates shown in Figures J and K reflect plans for general employees and teachers and predominantly exclude plans whose members are public safety personnel, judges, and legislators.

      Figure J                                                                                            Figure K

Figure L displays the range of employer contribution rates paid in FY 24 for plans whose members participate in Social Security. The lowest rate is 5.8 percent and the highest is 63.2 percent.

Figure M displays the range of employer contribution rates paid in FY 24 for plans whose members do not participate in Social Security. The lowest rate is 7.9 percent and the highest is 62.7 percent.

Figure L                                                                                            Figure M

Figure N presents the cumulative sources of revenue into public pension funds for the 30 years ended in 2024. Although investment earnings are the most volatile source of revenue, over time, these also are the largest source of earnings, consistently accounting over 30-year periods for around 60 percent of public pension fund revenue. This chart illustrates the vital role that investment earnings play in funding public pension benefits. The large portion of revenue from investment earnings also illustrates why even a relatively small change in a plan’s investment return assumption can have a large effect on the plan’s funding level and required cost. 

Figure N

As shown in Figure O, according to investment consultant Callan, the median investment return for plans with a FY-end date of June 30, 2024, (the FY-end date used by approximately three-fourths of the funds in the survey), was 10.2 percent; the return for plans whose fiscal year-end is 12/31 (used by most other plans) was 10.0 percent. As discussed in the narrative accompanying Figure C, because most plans phase in, or smooth, their investment gains and losses over several years (five years for most plans), returns over periods of four or five years are more consequential to funding levels than the return of any single year. The median returns for five-year periods ended in FY 24, slightly above the median investment return assumption of 7.0 percent, are consistent with the nominal improvement in public pension funding levels shown in Figure A, above.

Notably, for nearly all periods shown in Figure O except the three-year returns (which include sharply lower returns in FY 22, as shown in Figure F, above), median investment returns exceed the current median investment return assumption of 7.0 percent.

Figure O

Of all actuarial assumptions, a change to a public pension plan’s investment return assumption typically has the greatest effect on the plan’s funding level and its projected long-term cost. This is because, over time, most of the revenue of a typical public pension fund is expected to come from investment earnings.  

As shown in Figures P and Q, from the beginning of this survey (and for several years preceding), until FY 11, the median investment return assumption used by the 131 public pension plans in the Survey was 8.0 percent. Following the sharp decline in global capital markets in 2008-09 and the decline in interest rates and projected returns on major asset classes that followed the Great Financial Crisis, every plan in the Survey reduced its assumed investment return, many more than once. This trend resulted in a reduction to the median return assumption to 7.0 percent in FY 21, where it remained since. Figure P compares the distribution of investment return assumptions for each fiscal year since the inception of the Survey; Figure Q illustrates the steady reduction in assumed rates of return, particularly since 2009. 

Reducing a plan’s investment return assumption increases its projected liabilities and the plan’s cost. The extended period of reductions in the investment return assumption challenged the ability of pension plans’ to improve their funding level: even as benefit levels were reduced and contribution rates and actual contributions into pension funds increased, as shown in Figure A, above, funding levels for many plans struggled to improve, due partly to lower investment return assumptions.

Figure P

Figure Q reflects the investment return data shown in Figure P (above) after distilling the data into an average and median. Notably, the median return has held steady for four years, from FY 21 to FY 24, likely a result primarily of the higher rate of inflation in the U.S. since 2021, which has coincided with, if not contributed to, higher interest rates and higher expected nominal returns for major asset classes.

Figure Q

Figure R plots the average asset allocation of a representative sample of state pension funds since FY 05. The average allocation to public equities—traditionally the largest asset class among public pension funds—steadily declined since the drop in global capital markets in 2008-09. This secular decline in the allocation to public equities reached its lowest point--42.2 percent—since the beginning of the measurement period in FY 22, and has increased since. This experience reflects a combination of shifting target allocations toward greater use of alternatives, and the sharp decline in equity markets in 2022. The average allocation to equities has grown since, to 44.4 percent in FY 24, reflecting strong returns since 2023.

As with public equities, the average allocation to fixed income also reached its lowest level in the history of the Survey in FY 22, reflecting both smaller target allocations to fixed income and declining bond market values. The allocation to fixed income has increased since, to 21.1 percent, in FY 24. Allocations by public pension funds to public equities and bonds historically comprised the bulwark of public pension portfolios. This predominance has been reduced by steady growth in allocations to alternatives and real estate: the average allocation to alternatives (chiefly private equity and hedge funds).  

In recent years, a growing number of institutional investors, including public pension funds, have moved away from managing their portfolios via the use of discrete asset classes, in favor of portfolio management strategies based on levels of risk and other more holistic factors. One outcome of this trend is the presentation in public reporting of asset allocations that does not specify the fund’s actual or target allocation to traditional asset classes, such as public equities and fixed income.

This trend may be exemplified by the recent decision by the board of the California Public Employees’ Retirement System (CalPERS) to move to a “total portfolio approach,” or TPA. TPA features the management of assets under a single objective, unlike the traditional strategic asset allocation approach, in which separate asset classes are siloed and managed separately. 

Figure R

• Appendix A: Public Retirement System Assets and Membership (PDF)

  • ​Search tool: View and download Appendix A data

• Appendix B: Actuarial Funding Levels for FY 24 (PDF)

  • ​Search tool: View and download Appendix B data

• Download a PDF version of the FY 24 Summary of Findings

See Also

• Public Plans Data

• NASRA Issue Briefs, Papers & Analysis

 

Prepared by: Keith Brainard and keith@nasra.org 202-624-8464

Alex Brown alex@nasra.org 202-624-8461